US Data Reveal Cracks in the Economy
Friday’s US Personal Income and Outlays report supported expectations of a Q3 Fed rate cut. While inflation edged higher, personal income and spending unexpectedly fell in May, suggesting a weaker consumption outlook.
Given private consumption contributes over 60% to the US economy, a pullback in disposable income and consumer spending could raise recession risks. Weaker spending may also dampen demand-driven inflationary pressures. Friday’s data followed a sharper-than-expected economic contraction in Q1 (-0.5% QoQ vs prelim. -0.2%).
According to the CME FedWatch Tool, this week’s data and Fed comments pushed the odds of a Q3 Fed rate cut up from 69.7% (June 20) to 91.4% (June 27). Several Fed speakers, including Susan Collins, Mary Daly, Austan Goolsbee, and Michelle Bowman, signaled support for further monetary policy easing.
Could BTC retest record highs? US BTC-Spot ETF Market Extends Inflow Streak
Market expectations of a Q3 Fed policy move drove demand for US BTC-spot ETFs. According to Farside Investors, inflows skyrocketed. Key inflows for the week ending June 27 included:
- BlackRock’s (BLK) iShares Bitcoin Trust (IBIT) continued to dominate, with weekly net inflows of $1,310.9 million.
- Fidelity Wise Origin Bitcoin Fund (FBTC) had net inflows of $504.5 million.
- ARK 21Shares Bitcoin ETF (ARKB) saw net inflows of $268.2 million.
The US BTC-spot ETF market extended its net inflow streak to 14 sessions, with total weekly net inflows of $2,214.8 million. After a cautious start to the month, total net inflows for June stand at $4,476.6 million, another solid showing after May’s inflows of $5,232.1 million. Spot ETF inflows drove BTC to a record high of $111,917 in May.
BTC Price Outlook: Key Drivers
BTC’s near-term price trajectory hinges on several key macro and market drivers:
